Mounce v. Wightman

• Court: Arizona Supreme Court
• Writing for the Court: LOCKWOOD, J.
• Citation: Mounce v. Wightman, 29 Ariz. 567, 243 P. 415 (Ariz. 1926)
• Decision Date: 17 February 1926
• Docket Number: Civil 2446
• Parties: HENRY MOUNCE and EDITH E. MOUNCE, Appellants, v. ELIZA J. WIGHTMAN, Appellee

243 P. 415

29 Ariz. 567

HENRY MOUNCE and EDITH E. MOUNCE, Appellants, v. ELIZA J. WIGHTMAN, Appellee

Civil No. 2446

Supreme Court of Arizona

February 17, 1926

APPEAL from a judgment of the Superior Court of the County of Gila. Dudley W. Windes, Judge. Judgment reversed, with instructions.

Mr. Jay Good and Messrs. McKenzie & Loose, for Appellants.

Mr. L L. Henry and Mr. W. D. Moore, for Appellee.

OPINION

LOCKWOOD, J.

Henry Mounce and Edith E. Mounce, his wife, hereinafter called defendants were the owners of certain real estate in Graham and Gila counties, Arizona, and a number of cattle running on the open range in the same counties. This property was subject to various encumbrances, which were, in their order: First, a mortgage on the cattle alone in favor of the First National Bank of Globe for approximately $2,600; second, a mortgage for about $1,700 on both the cattle and the land involved in this case to one J. W. Rais; and, third, a chattel mortgage on the cattle to Eliza J. Wightman hereinafter called plaintiff, and to one Rolla Wightman, for some $35,000. This last indebtedness was also secured by a realty mortgage on the land situated in Graham county.

J. W Rais transferred his mortgage to Sam Rais, and the latter, in January, 1924, sold it to plaintiff. On February 1st, 1924, defendants filed a declaration of homestead under the statute, embracing the land covered by the Rais mortgage, and shortly after suit was brought by plaintiff and Rolla Wightman in Graham county to foreclose the third mortgage; the First National Bank of Globe, the holder of the first mortgage, being duly made a party thereto. Defendants answered the complaint, and set up the declaration of homestead and the second mortgage above referred to, asking that the Wightmans be required to foreclose the latter in the action, and that it be ordered the proceeds from the sale of the mortgaged cattle be applied: First, to pay the bank; second, to satisfy the Rais mortgage, and the balance to be paid upon anything found due the Wightmans.

Upon hearing this application, the trial court entered the following order:

"The prayer of the defendants to require the plaintiffs to amend their complaint and foreclose the Rais mortgage in this action will be denied."

Thereupon the suit went to judgment in favor of the Wightmans, and the real estate and cattle covered by their third mortgage were sold thereunder. The cattle were bid in by plaintiff for the sum of $20,000. The first mortgage of the bank was duly paid from the proceeds, and the balance applied upon the judgment. Defendants gave notice of appeal from the order refusing to compel a foreclosure of the Rais mortgage in the action, but the appeal was never perfected.

Thereafter plaintiff brought this action in the superior court of Gila county to foreclose the second, or Rais, mortgage against the real estate covered by it. Defendants, answering the complaint for foreclosure, set up, in substance, the following defense: That the Rais indebtedness had, as security for its payment, in addition to the mortgage on the real estate covered by the declaration of homestead, a second mortgage on the cattle foreclosed in the suit in Graham county, and that plaintiff had promised to exhaust the proceeds of the cattle before proceeding against the land; that the cattle brought far more than sufficient to satisfy the first mortgage of the bank; and that it was therefore the duty of plaintiff to apply the surplus proceeds of the sale of the cattle on the next, or Rais, mortgage covering them, to its satisfaction, before any of it could be applied upon the third mortgage which had been foreclosed in Graham county by plaintiff and Rolla Wightman. Plaintiff replied, setting up a plea of res adjudicata by means of the suit in Graham county. The matter was heard before the court, which rendered judgment in favor of plaintiff for foreclosure of the mortgage on the homestead, and from the judgment an appeal was taken to this court.

In determining this case, there are but two questions for us to consider, both of law: First, was the judgment in Graham county res adjudicata as to any right of defendants to compel plaintiff to apply the proceeds of the sale of the cattle to the Rais mortgage? And, second, if it was not, did defendants have the right to compel such application? In the proceedings in Graham county the complaint did not seek the foreclosure of the Rais mortgage. Defendants attempted by motion to compel plaintiff to add that issue to the complaint, and the court refused to include it. To say that the refusal of the court to include a certain question in a suit involving another matter, which does not necessarily depend upon the one not included, is a determination of the merits of the excluded matter would certainly seem a rather unusual conclusion. Neither the mortgagor nor a senior or junior encumbrancer can compel the holder of a mortgage to foreclose it, in the absence of a statute authorizing such action; the only right of the mortgagor being to tender the amount due on the mortgage and ask that it be canceled. Kinlock v. Savage, Speer's Eq. (S.C.) 464; White v. Lucas, 46 Iowa 319; 27 Cyc. 1547.

Such being the case, when the superior court of Graham county refused to compel foreclosure of the Rais mortgage, it was in no sense res adjudicata as to that mortgage or as to any defense which could be made thereto.

We next come to the more serious question: Had defendants the right when suit was actually brought, to foreclose the Rais mortgage to require plaintiff first to exhaust the security...